A Non-Designated Beneficiary is an estate, charity, or non-see-through trust. None of these entities are natural persons.
The 2001 Required Minimum Distribution (RMD) Rules for Non-designated Beneficiaries were minimally affected by the SECURE Act of 2019. The change from 70-1/2 to 72 years of age for RMDs indirectly caused the Required Beginning Date (RBD) to slip slightly.
If the participant died before his or her RBD, the custodian must distribute the account to the beneficiary using the 5-Year Rule.
If the participant died before 2020, but after his or her RBD, the RMD payouts may continue under the 2001 Rules.
As a practical matter, the settlement of estates and distributions to charities are often settled as soon as possible in the five-year period.
ProTracker Advantage®, our client relationship management (CRM) software, calculates the correct distribution schema for the various situations postulated above.
Knowing when the 5-Year or 10-Year Rules expire for each client account is best managed in a CRM, not on a spreadsheet. ProTracker Advantage provides an extensive and easy-to-use RMD calculator and tracking tool to guide the advisor in distributing the accounts as required.
Learn more about calculating RMDs and documenting them.
Take the Visual Tour to explore the extensive features of the ProTracker Advantage RMD Calculator Assistant.